City Paper Cover Story on Downtown Housing
Source : * http://www.pittsburghcitypaper.ws/main.cfm :Writer: Violet Law, 8/10/2006, Pittsburgh City Paper : http://www.pittsburghcitypaper.ws/archive.cfm?type=Main%20Feature : http://www.pittsburghcitypaper.ws/cover_story/index.cfm?type=Main%20Feature&pagenum=1 A Tale of Two Center Cities Downtown living pairs rich and poor — with few residents in between Few places bring the worlds of affluence and indigence as close together as the 400 block of Wood Street in Downtown Pittsburgh. At the north side of the block sits The Carlyle, a luxury condominium in the making. The lobby is anchored by marble pillars the size of ancient oaks. Champagne flutes line the ledge of one of its iron-framed windows; alongside them hangs a banner announcing 61 soon-to-be-ready units going for $250,000 and up. Just next door is Wood Street Commons, where rents range from nothing to $300 a month. The stone-cast, steel-pillared structure serves as a haven for 258 formerly homeless people, offering a single bed, a sink and a view of a construction crane from afar — an increasingly common sight as Downtown reinvents itself as the city’s hottest neighborhood. Over the past year, a rash of new residential developments have been proposed Downtown. Some are already well underway — spurred on by government officials doling out public subsidies. In the wake of former Mayor Tom Murphy’s failed plans to redevelop the Fifth and Forbes corridor, a consensus has emerged that retail alone cannot fill the void of the Golden Triangle. To have a 24-hour Downtown, the chorus goes, we need people not just to shop and play but to stay. Subsidies for Downtown living are nothing new. Nearly one out of every four rental units in the Greater Downtown area is government-subsidized dwellings for seniors and low-income residents. But developers today — who have as many as 1,200 housing units in the pipeline — are looking to tap into a much more upscale market. And as expensive condos and high-end rental apartments pack the developers’ drawing boards, affordable-housing advocates and others question if there will be a place for those with middling incomes in the city’s newly declared 89th neighborhood. Those making something close to the region’s median income ($44,300 for a family of two) don’t earn enough to buy a Carlyle condo, and yet earn too much to live in subsidized apartments. The absence of middle-class housing Downtown helps create the juxtaposition of the rich and poor that you find on Wood Street. It may also threaten the long-term health of the area’s fledgling housing market. “If we want Downtown housing to work, it can’t be only for the richest or the poorest,” says Bill Gatti, president of TREK Development, a Downtown-based developer of residential complexes catering to low- and moderate-income families. “You have to create housing for a broad range of income and to attract a broad range of people. Having people of different income groups is a more sustainable model for housing.” Others are concerned that Downtown’s future is being envisioned with only the well-to-do in mind. “Lower-income Pittsburghers are being left out of the picture,” says Paul O’Hanlon of the Disability Law Project. Along with other advocates, O’Hanlon has recently launched an effort to push for more affordable housing throughout the region. Residents of Wood Street Commons in particular are feeling the squeeze. They worry that Point Park University, whose enrollment has swelled by more than 50 percent in the last decade, covets the all-single-room building as a future dormitory. Currently, the Commons’ housing operations are subsidized through a lease with Allegheny County Department of Human Services, but that lease runs out in June 2008 and will not be renewed. “We’ve got to save this building,” says Phil Pappas, a co-founder of the Commons. “We were the first people to say Downtown is a good place to live.” Actually, although we now think of the Golden Triangle as the region’s central business district, there have always been Pittsburghers who called it home. Originally, the Point was Pittsburgh, and by the mid-19th century, it was settled chiefly by Irish immigrants fleeing the Potato Famine. They made their homes in row houses crammed between the warehouses and factories where they toiled. Then came the juggernaut that was Renaissance I, the city’s post-World War II renewal efforts led by then-Mayor David Lawrence. To make way for Point State Park, the slum was razed, including Lawrence’s childhood home. The city’s first residential high-rise, Gateway Towers, arose from urban-renewal efforts in 1968, and went condo in the 1970s. Around that time, with help from a new federal mortgage insurance program, building owners converted defunct hotels and vacant high-rises into low-income housing. Due to economies of scale, buildings that had many units proved more attractive to owners taking advantage of this program to subsidize conversions. Thus Roosevelt Arms, whose English Tudor-style lobby was once graced by well-heeled travelers, became housing for seniors. The May Building and Midtown Towers were turned into rent-subsidized efficiencies and one-bedroom apartments for low-income residents. All three buildings now have a mix of units federally subsidized at different levels, depending on the tenant’s income. By the early 1980s, as awareness of the nation’s homeless dawned, local foundations, elected officials and social workers hatched a plan to house the city’s destitute. The then-YMCA headquarters on Wood Street, which served partly as a boarding house, was up for sale. With funding from foundations and the federal government — and with no small amount of help from the late Sen. John Heinz III — a partnership between a real-estate management company and a social-service agency bought and refurbished the 16-story building into single-bedroom units in 1986. “A lot of developers here have no knowledge of what this building is about,” says Pappas. The provision of permanent housing, coupled with services, was touted nationally as an innovation at the time. Even today, the Commons remains one of the few places in the country that provides stable housing and supportive services that keep people off the streets. Those living there are served by social workers on site, and tenants can stay as long as they pay rent and abide by the regulations. The Commons is home for more than 400 formerly homeless people each year, most of whom have physical disabilities. Some stay for a few months and then move on; many more have chosen to make this their permanent home. When he moved into the Commons in 1996 after a house fire sent him to the streets, Bill Prosser thought he would soon move on to free up the space for others in need. Prosser was making a decent income as a cook at a hotel restaurant Downtown by day and as a telemarketer by night. He was planning to move into an apartment in Sharpsburg. Then one day he passed out on the kitchen floor. He was later diagnosed with a seizure disorder. When he got so ill that he had a seizure nearly every day, fellow residents would take turns checking up on him. “This is my family,” says Prosser, 52. “If someone doesn’t see me at breakfast, I need to call downstairs to let people know, or else people will start knocking on my door.” Known by his flowing white beard, Prosser usually holds court in the cafeteria or the computer lab, where he is one of the monitors in charge of locking up. “The old heads are trying to make things function,” Prosser says. These days, “old heads” like Prosser and seven-year-resident Jack Mooney are busy planning for their annual picnic in Schenley Park. Outside the computer lab in the recreation area, other residents bond over borrowed cigarettes or a boisterous game of spades. Mooney runs the movie nights every Friday and Saturday, showing double-header features and selling hot dogs and ice cream. One recent Saturday night found Peg Goughnour reading while others were glued to the rec room’s TV set. Goughnour, 62, a retired school bus driver who moved in four years ago, recalled finding a roof over her head at the Commons when she came out of open-heart surgery and had “nothing but a green garbage bag full of clothing.” Once her health stabilized, Goughnour says she could’ve moved out. But she found few places she could afford, especially Downtown, on her Social Security income. Tenants like Goughnour pay a portion of their Social Security as rent. Those who work have their rent capped at around $300 a month, or no more than 30 percent of what they take home. A commercial kitchen in the basement serves three hot meals a day for a few bucks, supplementing what otherwise would be a food-stamp subsistence. Goughnour pays the top rent at $75 a week for her room at the Commons, and says she could never live anywhere else Downtown. “I can’t see the reason they charge the kind of rent they do,” she says. “The poor guy who has worked all his life can’t afford it because Social Security can’t pay for it.” Without ongoing county subsidies or substitute funding, the building couldn’t house low-income residents, as it has for the past 20 years. And residents worry that with Point Park University expanding nearby — and a government-sponsored attempt to make Downtown more upscale — they will have few places to go in the future Downtown. (University officials say they won’t have plans for further expansion until after the end of the year, and would not predict whether acquiring the Commons would be a part of those plans.) Should Wood Street Commons close, Goughnour wonders aloud, “Where are the 258 people going to go?” For developers and urban planners trying to revitalize the Golden Triangle, retaining residents like those in the Commons is not the burning issue. The future, they say, lies in attracting new, more affluent residents instead. Historically, Downtown’s population has hovered in the low thousands. In 1970, nearly 3,200 lived in the Golden Triangle. That dipped to around 2,400 during the 1990s but climbed back up to nearly 2,700 by the end of 2004, according to the latest estimate by Pittsburgh Downtown Partnership. This surge was due in part to the growing appeal of new loft living. Downtown demographics remain dominated by young single people and empty-nesters — those who don’t mind packing their lives into one or two bedrooms. “The first thing is to get more housing Downtown, get more people Downtown and get a buzz about living Downtown,” says Don Carter, a principal of Urban Design Associates under contract with the city to devise redevelopment strategies for the Fifth-Forbes corridor and Market Square. To that end, Carter says, “I don’t think we need to put the brakes on the high end at all. If there is a demand, take it.” “In starting out … we’re not sure what we can get,” says Tom Cummings, director of housing programs for the city’s Urban Redevelopment Authority, URA. “We let the market take over and see what we can get.” Developers are doing just that. The Encore on 7th, a 16-story apartment building that overlooks the Allegheny, has one-bedrooms starting at $1,600 a month. (That’s expensive even for Downtown, where average rents are $1,073.) The first residential high-rise built in the Triangle in nearly 40 years, The Encore features apartment types named after musical terms (the penthouses are called “Finale”). Since its spring opening, nearly half of its 151 units have been leased. New condo prices are steep, too. From 2003 to 2005, the median sale price of existing condos Downtown was between $82,500 and $95,000. But the yet-to-be-built condos of 151 FirstSide are going for $290,000 — and up. So far, 42 of the 82 units, slated for completion next spring, have been sold. The 65 luxury condos, these being built inside the former Lazarus department store, are priced at about the same level. Given Downtown’s previous residential development drought, planners and development officials feel encouraged by the recent activity. And at first glance, Christina Bucciero’s recent rooftop party could almost be ripped from a Downtown developer’s brochure. Bucciero and a few of her neighbors took in the sight of fireworks over PNC Park while downing mozzarella-stuffed olives and white wine. The neon signs for Downtown firms like Ariba and Duquesne Light seemed an arm’s length away from the top of 900 Penn, the six-story building Bucciero calls home. But even for the young professionals such loft housing is supposed to attract, it’s not easy paying for it. Bucciero’s two-bedroom place costs $1,600 a month. After graduating from college in Erie, Bucciero was determined to live on her own. But the high rent Downtown compels her to pair up with a roommate, four of which she’s had within the past year. And while she enjoys the high life of Downtown, she doubts many of her peers can afford to taste it. “Right now there is too much high-end (housing) being built,” she says. “Young professionals can’t afford a $500,000 condo, unless their parents are buying it for them.” Most young professional loft-dwellers Bucciero knows have to split the rent, she says, or else spend a good chunk of their paycheck on housing. Bucciero herself works for her family’s construction company, but “I still have to budget to make that work.” Not any longer, though. Bucciero has decided it’s time “to get my own space and get my stuff together.” She’s moving to a two-bedroom in a Victorian house in Allegheny West, for which she pays $800 a month, and enjoys easy access to a park and tennis court. Bucciero’s experience is reflected in the findings of a December 2005 study commissioned by the Partnership’s Downtown Living Initiative. Researchers from Carnegie Mellon University’s Heinz School of Public Policy and Management showed that it’s far more expensive to live in the Golden Triangle than even the priciest communities, whether as a condo-owner or as a renter. For example, a two-bedroom condo Downtown costs, on average, $9,000 in annual maintenance fees, compared to $2,052 in Shadyside and $4,200 in Mount Lebanon. The more than 100 young, single professionals who were surveyed said the current rent level — hovering at $1,100 a month for a one-bedroom — is above what most of them are willing to pay, especially given the amenities — or rather, the lack of amenities like a grocery store. “My concern would be how much of a market it’s going to be,” says Ray Czachowski, executive vice president of NDC Real Estate Management, which manages the May Building and Midtown Towers. The region’s population, he says, is flat. “There is no growth to sustain this housing. We’re just shuffling people from one part of town to another.” “What we start to see now is the gap,” says Patty Burk, director of housing and economic development with the Pittsburgh Downtown Partnership. Creating more housing for middle- or moderate-income will be one of the Partnership’s focuses in the next two years, but Burk says there is more than enough subsidized housing around. Even as the high-end housing is taking off, “we’re sensitive to the fact some people have been living in the Golden Triangle for many, many years,” says Burk. “We would certainly help them to stay because they help make this neighborhood.” Burk is involved in the Downtown Housing Working Group, which includes also local foundations, city officials and urban planners. She says the group is aware that there is a need for workforce housing — housing within reach of those making moderate income as service employees, office workers, etc. But the last thing the city should do, she says, is to slap affordable-housing mandates on developers, because as it is, officials and developers say, it already takes plenty of incentives to get developments off the ground. Acquiring land Downtown is expensive, as is infrastructure like parking, elevators and fire-suppression systems, which are essential in any tall building. Gatti, of TREK Development, says he’s been crunching numbers these days while exploring Downtown sites for mixed-income housing. It might be even harder to make affordable housing work on a smaller scale. Eve Picker, one of the earliest developers of Downtown lofts, has tackled a few developments of under 20 units. “It’s been always a struggle to make a break-even project,” says Picker. Old, convertible buildings Downtown all have their unique layout and other structural idiosyncrasies, Picker says. That, too, adds to the cost. “You can’t build anything affordable.” Residents at Roosevelt Arms make the most of the amenities they already have — so much so that sometimes their activities last long after the lights dim at Heinz Hall across the street. Every Friday evening at the recreation room in the building’s basement, residents lay out homemade dishes, some of which rival the offerings at the white-tablecloth restaurants surrounding the hotel-turned-apartment-building. After eating and bantering, the 10 or so regulars, most of them seniors, can’t wait to line up their square number cards and pennies for games of bingo, which often stretch till midnight. Flo Taylor doesn’t play bingo. She comes for the conviviality. “It’s a good mix of people,” says Taylor, a retired sales representative who moved in to the Roosevelt from Highland Park a year ago. Originally, Taylor says, she planned to work part time in order to afford to live Downtown, even though she was recovering from hysterectomy. “When I found this place, I could relax,” she says. “I needed a break.” Like the other two federally subsidized residences Downtown, Roosevelt Arms sports a mix of incomes. Out of the Roosevelt’s 191 units, 108 are covered by the Section 8 housing vouchers, which cap rent at 30 percent of a tenant’s income. (The balance is covered by federal subsidies.) The rest of the units are taken by working people who pay up to $744 each month as rent, including utilities, for a one-bedroom — a rent level deemed affordable by the federal government for those making the area median income. Doug Patterson, a senior pastor at the Smithfield United Church of Christ, has opened his doors to shelter the homeless, most recently during the All-Star Game. For him, Downtown needs to be inclusive in order to stay vibrant, much like his church. “We here practice extravagant welcome; we welcome all people,” says Patterson. “If you truly have a healthy city and healthy Downtown, you’re not trying to market it to one group of people.” The same goes for the use of subsidies, some contend. Currently, Downtown is a market where housing is subsidized for the very poor and the very affluent — but not for those in between. The Encore received a $4 million loan from the city’s Urban Redevelopment Authority to cover some of its $36 million development costs. It also qualifies for a 10-year tax abatement from city, county and public schools — a break worth up to $500,000 per year. Millcraft Industries, which has proposed three residential developments in the Fifth-Forbes corridor, is asking the state for $18 million in subsidies in order to build more affordable condos going for $150,000 to $200,000 apiece. “If we’re going to subsidize Downtown developments, residential or otherwise, we should be making provisions for middle-income, moderate-income housing,” says Larry Swanson, executive director of ACTION-Housing, one of the region’s major nonprofit developers of affordable housing. “Is this housing serving the taxpayers? Their dollars are subsidizing the developments that are being built,” says Ronell Guy, director of education and outreach of the Housing Alliance of Pennsylvania. Of course, Swanson must reckon with the same economics that developers like Picker contend with. It costs nearly twice as much to build a unit Downtown as in other communities, he says. Say what? Why of course... ?? As much as he says he recognizes the significance of a housing mix to maintaining the fabric of a neighborhood, Swanson says, “I’d rather build two units in the proximate area than one unit Downtown,” in order to maximize the supply of affordable housing overall. Even so, there’s no question about the demand for more moderately priced housing Downtown. While high-end high-rises still wait for tenants, the current waiting lists for Downtown’s three subsidized buildings — May, Midtown and Roosevelt Arms — run from three months to a year-and-a-half. Nor is there much question that Downtown’s lower-income residents already have some of the neighborhood feel that developers want to create. The question is whether lower-income residents will still be around to enjoy it. Prosser of Wood Street Commons, for example, can count on getting an extra wingding at George Aiken’s diner, down on Third Street, or a bonus donut from Jenny Lee Bakery in Market Square, which takes food stamps. But he also says “you have people who look through you half the time. The suits. The working Joe — like I used to be.” And with all the talk about creating a neighborhood Downtown, Prosser wonders if his neighbors are what officials have in mind. “We are not on the tax roll,” Prosser says. “Do they still count us?”